International traffic drives modest French growth

Last year was another mixed year for French airports. Total traffic grew by 4.3% to 143.5 million but growth was slower than in any of the previous three years. However, given how passenger numbers stagnated between 2000 and 2003 this modest growth maintains a healthy upward trend.

Source: www.aeroport.fr

AdP’s €2.7 billion investment programme, launched in 2006, includes construction of the regional terminal – T2G – at CDG, which will handle Schengen zone passengers who fly on 50-100-seat aircraft. It is scheduled to be completed in 2008, along with a new boarding pier for Terminal 2E.

The ADP operated airports of Charles de Gaulle (CDG) and Orly (ORY) have consistently accounted for around 60% of all passenger traffic at French airports and in 2007 CDG grew by 5.4% to almost reach 60 million passengers, while ORY grew by 3.2% to pass 26 million. Of the additional four million passengers handled last year half were generated by low-cost carriers (LCCs) which enabled them to increase their market share from 8.7% in 2006 to 10.6%.

Nice leads regional competition

Competition among French regional airports remains intense as each tries to find ways of generating additional passengers and revenues. The top eight regional airports all saw passenger numbers increase with Nice breaking through the 10-million mark for the first time.

Source: www.aeroport.fr

Marseille (+14.2%), Paris Beauvais (+14.2%) and Lille (+12.1%) all enjoyed double-digit growth while Strasbourg saw traffic fall an alarming 15% on the back of the new TGV Est services wiping out half of its traffic on the key Paris route.

LCCs increased their market share at regional airports from 22% in 2006 to 24% last year and accounted for around 60% of all passenger growth. Some airports such as Bergerac, Carcassonne, Nimes and Paris Beauvais rely almost exclusively on LCCs for passenger traffic.

Air France dominates domestic routes

According to OAG data for the upcoming summer period Air France has an 87.4% share of scheduled seat capacity in the French domestic market. Given that Air France also owns 12% of CCM (which operates to Corsica and has a 4.8% share of domestic traffic) that leaves easyJet as the only real competition to Air France. easyJet currently flies five domestic routes with the two biggest (Orly to Nice and Orly to Toulouse) accounting for two-thirds of their 4.5% share of domestic capacity.

Air France has an 87.4% share of scheduled seat capacity in the French domestic market. The airline also owns 12% of CCM, which operates to Corsica and has a 4.8% share of domestic traffic.

Despite competition from the TGV the Paris-Nice and Paris-Toulouse routes each carried over three million passengers in 2006 making them among the busiest in Europe. The Paris-Marseille and Paris-Bordeaux routes each with around 1.5 million annual passengers remain Air France monopolies. The Paris-Strasbourg route which generated over one million air passengers in 2006 saw monthly demand drop by 50% once the TGV Est was inaugurated last June.

Despite a significant presence on international routes (see below) Ryanair had until recently shown no inclination to start domestic routes in France. However, it recently announced plans to link its Marseille base with Paris Beauvais four-times weekly from 2 May.

While TGV fares are considered reasonable compared to other high-speed rail networks across Europe latest indications are that the tolls for using the tracks may rise by as much as 80% by 2015.

Air France facing growing international LCC threat

Air France’s market share of capacity on international routes at Paris CDG (pictured) and Orly is 45%, with 148 routes operated.

According to DGAC data for the first six months of 2007 international traffic was up 7.3% though this disguised some regional variation. Demand to other EU states was up an impressive 8.5% while North American traffic was up just 2.0%. Traffic to Japan declined.

Air France has just over one-third of all scheduled flights and capacity on international routes from all French airports with Ryanair and easyJet providing the strongest competition. LCCs now have an estimated 24% share of international scheduled capacity helped by the creation of Transavia France, a joint venture between KLM-owned Transavia and Air France, which has started operating from Paris Orly to North African and southern Mediterranean destinations.

Airline

Frequency share
(All airports)

Capacity share
(All airports)

Number of routes
(All airports)

Air France

34.3%

35.0%

193

Ryanair

4.8%

6.6%

79

easyJet

5.7%

6.5%

57

Lufthansa

6.5%

4.0%

25

Iberia

3.9%

2.6%

23

British Airways

2.3%

2.4%

8

Source: OAG Max Online for w/c 31 March 2008

If only the two major Paris airports are considered, Air France’s market share rises to around 45% and Ryanair disappears from the rankings completely as it serves Paris Beauvais instead.

Airline

Frequency share
(CDG & ORY)

Capacity share
(CDG & ORY)

Number of routes
(CDG & ORY)

Air France

45.6%

44.5%

148

easyJet

4.7%

4.5%

24

Lufthansa

5.0%

2.8%

9

Iberia

2.7%

2.2%

9

Vueling

1.7%

1.9%

9

Source: OAG Max Online for w/c 31 March 2008

easyJet has bases at both Orly and Charles de Gaulle and opens its third French base in Lyon in April. Considering the number of flights it operates to Nice it is surprising that the airport is not a base. Similarly, despite operating 14 routes from Beauvais, Ryanair does not base any aircraft or crew at the airport. Ryanair does base aircraft in Marseille from where it operates to 12 destinations this summer. In total Ryanair operates to over 20 different French airports whereas easyJet operates from just eight.

UK is leading international market

As might be expected, international air travel is dominated by France’s four major neighbours – the UK, Spain, Italy and Germany.

Source: OAG Max Online for w/c 31 March 2008

Three North African countries (Algeria, Morocco and Tunisia) feature highly as does the USA. The leading Nordic country is Sweden (ranked 14th) while the leading Central European market is the Czech Republic (23rd) with Poland just behind in 24th. Clearly Polish workers are not flocking to France to seek their fortune, but instead preferring the UK and Ireland.